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The rise of SME-friendly procurement channels

In a bid to find innovative solutions to complex government issues, Australian jurisdictions are looking at new techniques that encourage Small to Medium Enterprise (SME) and start-up involvement in government problem-solving. Examples include Federal Government’s GovPitch, New South Wales Government’s Innovation Concierge (NIC), and Queensland’s Testing Within Government (TWiG) program.

In the past, innovative SMEs have been negatively impacted by risk-averse procurement policies, and encouraging SME participation has been long recognised as a way to increase competition and drive innovation in government. As a result, SME-friendly policies and initiatives, like the Federal Government’s Digital Marketplace, have been the focus of procurement reform for some time.

So far, several jurisdictions have started to make procurement processes simpler and more flexible to improve access to government contracts. Increasingly, governments are also looking at ways of making SME participation more targeted towards problem areas in government, which are often the most in need of outside-the-box thinking.

QLD’s Small Business Innovation Research (SBIR) challenge is one example – allowing businesses of any size to submit proposals to solve one of four particular challenges facing the QLD Government. Despite allowing all businesses to compete, by funding the research, development and testing of the proposed solutions, the program aims to create a level playing field for small businesses that have good ideas but lack the funding to back them. If successful, the solutions may then be procured by government.

QLD’s TWiG program, now in its second year, is aimed directly at increasing SME participation. 11 SMEs have been funded to test and refine their products by collaborating within government departments and agencies for 12 weeks. As part of the program, recipients are to showcase the products they have developed through the program at an event with Queensland Government business experts in attendance. The event will take place in September.

The focus on SMEs is set to continue with the QLD government’s DIGITAL1ST Strategy, released last week, which aims to “increase the number of Queensland start-ups and small to medium enterprises that are providing services to government.” Streamlining accreditation requirements for digital projects under $1 million is one such SME-friendly initiative.

NSW is also looking at new sourcing channels and initiatives to fast-track SME participation. One such initiative that may benefit SMEs is the NSW Innovation Concierge (NIC) program. The NIC program works by allowing innovators and entrepreneurs to submit proposals to address certain priority areas of NSW governance (such as childhood obesity or housing affordability), which are then assessed according to their social and economic benefits for NSW citizens.

At the federal level, the Government has launched GovPitch. The inaugural GovPitch event facilitated groups of cyber-security start-ups and SMEs to directly pitch their ideas to Chief Information Officers, Government Secretaries and Heads of Security at the Prime Minister & Cabinet Department in Canberra.

The Australian Capital Territory’s Small Business Innovation Partnership (SBIP) program balances the opportunity for SME development as well as the risk for the department or agency, allowing them to fund the development of a product but opt out of contracting the supplier if the risk is too high. The program aims “to connect the ACT Government with small-medium enterprises to deliver innovative solutions to complex government problems.”

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